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Text offers two far-apart visions for finance goal without numbers
Early on Thursday morning, the COP29 Presidency released a draft document intended to serve as the basis for a deal on a post-2025 goal for climate finance for developing countries.
As expected, the text leaves the most contentious issues undecided including who pays, how much and what the structure of the goal should be.
The text has two main options for how the goal would look: the first reflects developing-country preferences, and the second is what developed countries want to see.
Option one includes an annual goal starting from 2025 and running until 2035, while option two is a goal to be reached by 2035, giving wealthy nations longer to ramp up to meet it.
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Option one says the finance would come from developed to developing countries – although it also accepts developing countries being “invite[d]” to provide finance “voluntarily” as long as this does not count towards the main goal.
Option two refers to the money coming from a “wide range of sources and instruments, including public, private and innovative sources, from bilateral and multilateral channels”.
It states that developed countries should take the lead but also includes “efforts of other countries with the economic capacity to contribute”, as well as accounting for current bilateral and multilateral efforts, and finance mobilised by all other climate finance providers.
Option one says the goal should include finance provided by developed countries’ governments as well as private finance mobililsed by developed countries’ governments. These are the same categories included in the current $100 billion a year goal, which this goal will replace.
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But option two includes a much broader array of finance including innovative sources. It does not specify – but these could be measures like taxes on plane tickets or financial transactions. The word “including” leaves this list of sources open-ended and there are fears this could allow developed countries to include money from carbon markets.
While option one would just have a provision and mobilisation goal, option two would have a mobilisation goal led by developed-country governments, as well as a bigger, broader investment goal.
While all governments agree that only developing countries should be eligible to receive the finance, the extent to which the world’s poorest countries (LDCs) and small island developing states (SIDS) should be prioritised is still not agreed.
LDCs and SIDS want an annual minimum of $220bn and $39bn respectively. But in the text this has been left in square brackets, meaning it is not agreed. Alternative options are phrasing stressing the particular vulnerability of LDCs and SIDs and text that does not mention country groups but instead call for “equitable resource distribution”.
Campaigners react to good, bad and ugly
Joe Thwaites, a climate finance expert at the Natural Resources Defense Council said ”the text caricatures developed and developing country positions on what the main goal should be. The Presidency needs to propose an option 3 that bridges the two.”
Harjeet Singh, a campaigner from the Fossil Fuel Non Proliferation Treaty Initiative, said it included options that were good, bad and “some downright ugly”. He expressed concern that there are no sub-goals for cutting emissions, adapting to climate change and for the loss and damage caused by climate change.
Laurie van der Burg, Oil Change International’s global public finance manager, pointed to language that promotes scaling up climate finance from new sources and instruments including “high-integrity voluntary carbon markets”.
“Labelling carbon credits as climate finance – which they are unreservedly not – should be axed from the text or risk creating a dangerous escape route for polluters,” she said.
She also warned that, unlike previous drafts, this draft text does not have an option ruling out counting investments in fossil fuel infrastructure as part of climate finance. “This is fundamentally incompatible with the goals of the Paris Agreement,” van der Burg said in a statement.
Mexico commits to net zero by 2050
Oil-producing Mexico announced a commitment to net-zero emissions by 2050 at a press conference in Baku on Thursday morning – though details remain sparse. It was the last G20 nation not to have set a net-zero commitment.
Jose Luis Samaniego, the Mexican environment ministry’s climate lead, told journalists that the new Mexican government was “running the numbers and having the necessary conversations to engage in a robust trajectory to net zero by 2050 that we will include in our long-term planning”.
“We don’t think this will be easy but we have never had a stronger political mandate to do so,” he added.
In the photos taken on October 28, 2021, it shows a solar energy park in Jalisco, Mexico. (CGGT/Ulan/Pool / Latin America News Agency via Reuters Connect)
David Waskow, head of global climate policy at the World Resources Institute think-tank, said “Mexico’s new commitment to reach net-zero by 2050 is a critical step to accelerate its climate efforts and attract investments for a low-carbon economy”.
Samaniego also said Mexico would submit an updated new national climate plan (NDC) next year and increase its ambition with a clearer and more credible emissions-reduction target for 2035, which could potentially include specific carbon budgets per sector.
It plans to ramp up renewables and invest in energy efficiency, as well as cleaning up damage to nature like rivers, among other measures, he added.